Essar Oil Completes Biggest Delisting in India’s Corporate History

Essar ranks among one of the world’s largest privately-held conglomerates, after Essar Oil’s delisting.

Essar Oil operates the 20 million tonnes (MT) Vadinar refinery. (Photo: Reuters)

Essar Oil on Wednesday announced completion of the company’s delisting from local stock exchanges after a payout of Rs 3,745 crore to shareholders, the largest in India’s corporate history.

<p>Oil Bidco (Mauritius) Ltd, promoter of Essar Oil (EOL), is pleased to announce the successful completion of EOL’s delisting offer process, which has emerged as the largest privatisation bid in the history of corporate India, valuing EOL at Rs 38,000 crore of market capitalisation.</p>

<p><b>Company Statement</b></p>

Of the 14.25 crore shares held by public shareholders, the promoters have acquired 10.1 crore shares through an offer made to shareholders, as against the requirement of 9.26 crore shares for delisting.

With this transaction, Essar ranks among one of the world’s largest privately-held conglomerates.

The shareholders tendered their shares between 15-21 December through the reverse book building window made available to them under the delisting regulations. While the floor price for the delisting was set at Rs 146.05 per share, Oil Bidco (Mauritius) has agreed to pay Rs 262.80 per share, which is a premium of 80 percent.

“The Rs 3,745 crore that will be paid to shareholders makes this the largest payout to privatise a publicly-listed company in India,” the statement said.

The shareholders who have not tendered their shares in the delisting offer can offer their shares to the promoters at the delisting price for a period of one year from the date of delisting.

<p>We are happy that we have been able to reward our public and institutional shareholders for the faith they reposed in us over the years. I want to...thank investors, stock exchanges and regulators for their support in this journey.</p>

<p><b> Shashi Ruia, Founder Chairman, Essar</b></p>

The Essar Oil stock has seen sustained and significant growth since its IPO in 1995. While the company’s market capitalisation stood at just Rs 2,000 crore in 1995, today it is over Rs 38,000 crore at the delisting price.

This has been made possible through strategic investments in the business since commencement of commercial operations at the Vadinar refinery, Gujarat in May 2008, especially in expanding and upgrading refining capacity – from 9 million tonnes to 20 million tonnes, and complexity – from 6.1 to 11.8.

Over the years, Essar Group, through privatisation of its corporate entities Essar Oil, Essar Ports, Essar Steel and India Securities, has made a payout of over Rs 7,200 crore to investors, thus providing substantial returns.

With this transaction, Essar ranks among one of the world’s largest privately-held conglomerates with large-scale, world-class operations across the globe, spanning oil refining and marketing, power, steel, ports, shipping, EPC and BPO.

Essar businesses have revenues of over $35 billion and employ more than 60,000 people. The group’s flagship Essar Oil operates the 20 million tonnes (MT) Vadinar refinery. Essar Power has a generation capacity of 6,700MW. Essar Steel has a capacity of 14 MT. Essar Ports operates terminal services with aggregate capacity of 120 MT. Essar Projects is a leading EPC contractor.